SANDVIK MATERIALS TECHNOLOGY PRIMARY PRODUCTS 1
SAFETY FIRST Sandvik‘s objective is zero harm to our people, the environment we work in, our customers and our suppliers. PROTECTIVE FIRST AID ALARM EQUIPMENT KIT EMERGENCY EMERGENCY ASSEMBLY NUMBER EXIT POINT 2
AGENDA SUPPLY CHAIN DEVELOPMENT PROJECT • Sandvik Materials Technology & Primary Products • Supply Chain and Planning Challenges • Project Background & Objectives • Planning Philosophy & iPlanner Set Up • Result • Summary Q&A 3
SANDVIK MATERIALS TECHNOLOGY • Part of Sandvik Group • Steel industry • 4 product areas: Tube (Primary), Kanthal, Powder and Strip • 6 500 employees • Primary Products runs iPlanner − Sales and Operations Planning (2013) − Master Planning (2015) 4
PRIMARY PRODUCTS WORLD-LEADING PRIMARY SYSTEM ROLE AND CAPABILITIES • Mission to secure EFFICIENT SUPPLY of stainless billets for seamless tube, bar and precision strip • Profitable Growth and SECURE SCALE • HIGHLY INTEGRATED PRODUCTION from melt to finished products with CLOSE COOPERATION WITH R&D • LEADING METALLURGY for our type of materials NICHE PLAYER • Production based on RECYCLED STAINLESS STEEL ADDRESSING 0.02% OF WORLD STEEL MARKET • STRONG COST position STEEL INSTALLED STAINLESS PRODUCTION CAPACITY IN STEEL SMT MELTSHOP 50 1500 0.3 FACTS Mtons Mtons Mtons • Products: rock drill steel, bars, blooms and billets • 580 employees Source: www.worldsteel.org, www.worldstainless.org, SMR - Steel & Metals Market Research, Sandvik Materials Technology
PRIMARY PRODUCTS PRODUCTION PROCESS ROCK DRILL STEEL FINISHING MILL HOT ROLLING Production of rock drill STEEL MILL AND steel is a process from AND FORGING Peel turning and finishing in billets to the finished CONTINUOUS product. the Finishing Mill expanded CASTING Processes include blooming in 2013 with: mill, forging press, bar mill, • From raw materials to Two peel turning lathes steckel mill, annealing and • bars and coils Four finishing lines quench annealing in our own steel mill • One end cutting line
PRIMARY PRODUCTS PRODUCT RANGE BAR STEEL BAR FOR EXTRUSION for compressor valves for a wide range of applications and shafts within for example the oil and gas industry HOT ROLLED COIL ROLLED & FORGED BILLETS for razorblades and for flanges compressors ROCK DRILL STEEL CONTINUOUS CAST for the mining industry BLOOMS & BILLETS for rerolling to bar and wire
AGENDA • Sandvik Materials Technology & Primary Products • Supply Chain and Planning Challenges • Project Background & Objectives • Planning Philosophy & iPlanner Set Up • Result • Summary Q&A 8
PRIMARY SUPPLY CHAIN Mix of Make-To- Order and Make-To- Steel Mill Stock Continuous Ingot Casting Casting Process uncertainty requires Many manufacturing Production alternatives for each frequent re-scheduling of campaigns implies product Master Plan longer lead times External Supplier Rolling mill Warehouse Finishing Moving Forging mill production bottlenecks Moving External External External production Customer Customer SMT Strip Customer SMT Tube bottlenecks
PLANNING CHALLENGES AND POSSIBILITIES UNCERTAINTY COMPLEXITY • • Complex products with up to six Long Value Chains variables • Unreliable and aggregated forecast • Product mix have high impact on capacity/utilization • Capacity set in tons per week, but one ton is not the same as another ton • Scrap and yield due to high quality standards – continues development of new materials/product
PLANNING CHALLENGES • Steel Mill: Campaign due to metallurgy reason • Weekly frequency, 2 week freeze period • Rolling Mill: Campaign planning due to • Bar & Strip • Bar: Temperatures & Dimension • Finishing Mill: Complex flows with different production routings • High fixed cost requires high utilization • Product Mix: approx. 10 000 p/n Primary Warehouse • Number of customer orders approx. 25 000 Finishing
AGENDA • Sandvik Materials Technology & Primary Products • Supply Chain and Planning Challenges • Project Background & Objectives • Planning Philosophy & iPlanner Set Up • Result • Summary Q&A 12
WE NEEDED CHANGE Delivery Precision • Perceived as unreliable supplier • Long lead-times • Disconnected planning between the Mills • High Inventory • Poor Delivery Precision 13
PROJECT OBJECTIVES • Sales and Operations Planning (3-15 Months) − Collect sales forecast − Balance demand and supply • Master Planning (1-12 Weeks) − Estimate customer order delivery date − Capacity in hours instead of tons − Calculate steel mill start date − Reschedule all manufacturing orders − Generate new manufacturing order proposals for Make-to-Stock flow
AGENDA • Sandvik Materials Technology & Primary Products • Supply Chain and Planning Challenges • Project Background & Objectives • Planning Philosophy & iPlanner Set Up • Result • Summary Q&A 15
PLANNING PHILOSOPHY BALANCING OF PRIMARY SYSTEM • High fixed cost – high utilization of production capacity • Lost time in up stream bottleneck can not be regained in down stream machines • Finite order intake in bottlenecks • Campaigns in steel mill & rolling mill to balance productivity, quality and delivery precision • Open up production down stream, secure no constraints in finishing mill
PLANNING PROCESSES WITH IPLANNER SALES AND MASTER OPERATIONS PLANNING PLANNING • Run scenarios with different • Automated process forecasts or adjusted capacity • Adjust capacity • Re-prioritize sub-contracting • Lock operations manufacturing alternatives • Que times and lead times • Identify opportunities to • Adjust parallel restrictions increase sales e.g. limit product group volumes per week, or machine group volumes per week • Safety stocks and inventory targets
BOTTLENECK OVERVIEW
WORK CENTER BOTTLENECK 19
IPLANNER MODEL • 150 Work Centers (Machines) • 2 000 active customer orders on average • 10 000 p/n • 100 000 production operation routing • 65 000 forecast records (S&OP) • Time for creating a new plan: 40 minutes (MP) & 4-5 Hours (S&CP)
IPLANNER CONFIGURATION - SANDVIK MP: 10-15% of resources are 365 Daily Buckets set to finite. Steel Mill- program frozen 2 week. S&OP: 60 Weekly Buckets Confirmed orders Different planned before new manufacturing orders. Customer alternatives. Orders are planned before Forecast in MP.
AGENDA • Sandvik Materials Technology & Primary Products • Supply Chain and Planning Challenges • Project Background & Objectives • Planning Philosophy & iPlanner Set Up • Result • Summary Q&A 22
RESULTS & CONCLUSIONS FOR PRIMARY • Better proactive planning, when we miss a delivery we can give the customer earlier “heads up” • Better common understanding of own capacity between planning and production (from tons to hours) • Integrated planning between our mills • Visual description of bottlenecks and understanding in the organization where is the bottleneck “today” • Built trust for the planning team which has made decision making clearer • Delivery precision to customer increased with about 7-10 percent
DELIVERY PRECISION iPlanner implemented 2018 YTD + Estimate 24
NEXT STEP @ PRIMARY SUPPLY CHAIN NWC Improvement Culture change and Courage, “dare to start order later” Detail planning in Rolling/Forging Still weekly bucket in Rolling Mill Plan, not direct connect with finishing mill
AGENDA • Sandvik Materials Technology & Primary Products • Supply Chain and Planning Challenges • Project Background & Objectives • Planning Philosophy & iPlanner Set Up • Result • Summary Q&A 26
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